Bank of America Corp (NYSE:BAC) who back in July acquired Countrywide Financial Corp agreed to assume $16.6 billion of debt and guarantees of the bank it said in Monday.

At the end of April this year Bank of America the North Carolina-based bank was looking at all options for the Countrywide debt, which is estimated at around $40 billion, However at the time there was no assurance it would guarantee, assume or redeem the debt.

This sparked fears that the corporate debt that the Bank of America did not take on would be exposed to defaults and high risks. America’s third largest bank has taken a step forward to relieve such concerns, stating that they are taking on the obligation to pay back any Countrywide Financial corporate debt holder.

Countrywide was the biggest mortgage lender in America before the Bank of America brought it on July 1 for $2.5 billion. In the third quarter Countywide added $259 million to Bank of America’s profits, although overall Bank of America share value is down 50 percent this year.

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Bank of America’s (NYSE: BAC) Countrywide Financial have been sued by Connecticut after it has been said that the company pushed borrowers into taking risky loans that they could not afford, other states such as California, Illinois, and Florida have also all filed similar charges, and we suspect more will follow suit.

Attorney General Richard Blumenthal of Connecticut wants Countrywide to make changes to mortgages that violated state laws and make restitution to affected borrowers, Blumenthal is also seeking fines of $100,000 per violation of state banking laws, and up to $5,000 per violation of state consumer protection laws.

Blumethal said he will be looking into the investment side of the consumer fleecing as he has shed loads of documentation to aid him in the process, he is also concerned as to why the Bank of America is still keeping the Countrywide name? As we know it takes 20 years to build a good reputation and five minutes to ruin it. Let’s face it how many people will go and get a loan at countrywide after all the bad press and the fact the company is being sued left right and centre by states all over America.

The Brand is clearly negative at this point.

I wonder is the Bank of America will rebrand Countrywide in a year or so. What are your views on the countrywide fleecing?

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The company have the Countrywide Change of Control Severance Plan posted on their internal website; the New York Post says that the BofA has the power if they want to pay severance benefits to a Countrywide worker who turns down a new position.

This is even if the new position contains significant changes in compensation or job location. BofA have said that they would consider paying severance if the employee has to relocate or takes a 20 percent cut in their compensation.

According to Reuters, the company has also stated that they would pay severance for lower-level employees, only if the job comes with a 10 percent cut in pay.

Bank of America Corp, took over Countrywide on July 1, they have since announced that they are to cut at least 7,500 jobs over the next two years, this amounts to 3 percent of their workforce.